Millions of Americans relying on Social Security, Supplemental Security Income (SSI), Social Security Disability Insurance (SSDI), and Veterans Affairs (VA) benefits will soon see a boost in their payments. Thanks to a 2.5% Cost-of-Living Adjustment (COLA), 2025 is bringing some financial relief—though on a smaller scale compared to recent years. Here’s a breakdown of what’s changing and how it could impact you.
How Much Will Payments Increase?
Starting in January 2025, Social Security beneficiaries will see their monthly payments rise by 2.5%. This may seem modest compared to last year’s increase, but it reflects the cooling of inflation. On average, retirees can expect an extra $50 added to their monthly check.
SSI and SSDI Recipients: What to Expect
For those on SSI, the new maximum federal payment for individuals will be $967 per month, up from $943 in 2024. Couples will see their maximum payments increase to $1,450. These changes will begin with payments issued on December 31, 2024, just before the new year.
If you’re receiving SSDI benefits, you’ll also see a 2.5% boost. While the exact increase will depend on your earnings record and when your disability began, most recipients will notice a welcome difference in their payments by January.
Veterans to See Higher Compensation
The Department of Veterans Affairs adjusts disability compensation rates annually based on the same COLA used for Social Security. Veterans receiving disability benefits can expect a 2.5% increase starting in January 2025. If you’re a veteran relying on these payments, the extra funds should help offset higher costs of living.
When Will You Receive Your Payments?
The payment schedule for 2025 follows the usual pattern:
- Second Wednesday of the Month: Payments go to people with birthdays between the 1st and 10th.
- Third Wednesday of the Month: Payments go to those born between the 11th and 20th.
- Fourth Wednesday of the Month: Payments go to people with birthdays from the 21st to the 31st.
SSI recipients will receive their payments on the 1st of each month. If the 1st falls on a weekend or holiday, the payment will be issued on the previous business day. In this case, the January 2025 SSI payment will arrive early, on December 31, 2024.
Major Legislative Change: The Social Security Fairness Act
A significant legislative update is also taking effect. President Joe Biden recently signed the Social Security Fairness Act, which eliminates two controversial rules: the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO).
Previously, these rules reduced Social Security benefits for public workers who also received a government pension, affecting around 3 million retirees. With the repeal of these provisions, public sector retirees can now receive their full Social Security benefits, providing much-needed financial relief.
Why Is This Year’s COLA Smaller?
The 2.5% COLA for 2025 is the lowest since 2020, reflecting a decline in inflation compared to the previous two years. While the increase is smaller, it still offers some relief in a time when prices for essential goods, like food and utilities, remain higher than usual.
What Should Beneficiaries Do Next?
Now is a good time to review your finances and understand how this increase fits into your overall budget. While the boost may not fully cover rising expenses, it’s a step toward addressing the financial challenges many retirees, disabled individuals, and veterans face.
Stay informed about additional legislative changes, and if you have questions about your specific benefits, consider contacting the Social Security Administration or your local VA office.
